Short sales are a wonderful thing...we believe it ...we do it...we learn from every listing...every twist and turn in the process. While we believe that a short sale is very often a great remedy for a distressed homeowner...there are circumstances that don't make it the best remedy. In some cases, it is necessary for us to step back....for us to refer the seller to a qualified real estate lawyer for evaluation of the entire situation....and monitoring that situation as things change in the life of the seller(s).
We had a listing that had an offer....and a few days before...the seller lost his job and decided to relocate to another part of the country to be closer to family members. While the timing was not great from a sales perspective...given the entire financial picture of the seller, bankruptcy was what his lawyer advised and in this case, this "highest and best source information" we believe, was good advice.
Distressed homeowners sometimes believe that a short sale will relieve them of all their debt ...the medical bills, credit cards, tax liens, car payments....just add them as liens on the house and the bank will "forgive" it all. While the banks have undoubtedly had some "overly generous" practices in the past...no money down....no doc...no no no....adding liens to the house does not obligate the lender to pay them.
Making the "highest and best" decision can be difficult at a time when a homeowner has less than optimum personal strength due to their hardship circumstances. There are lawyers who will advise bankruptcy when there are other options and there are realtors who will suggest a short sale when bankruptcy may be a better option. The whole picture has to be considered...not the easiest....not the quickest....but the way that will make the future a brighter place and in the end, give the greatest benefit to the homeowner.
Sally K. & David L. Hanson, ABR, CDPE, CSS, e-Pro,ILHM, REDS
This is a confusing time for many sellers .They should seek advice from good attorneys and tax profesionals.
right you are Gita...there are "good and bad" in every profession....sellers have to be sure that whoever the profesional...they are mindful of the sellers' best interests and not the wallet of the advising party.
Interesting! I think that you will see more of it as the next wave hits. This time it will be the upper echelon that did not use the NINJA loans...
Some of my sellers have filed a BK and we have been able to get a release of stay so the short sale could go forward and they still would not have a foreclosure on their records. But that is Florida. Don't know what the rules are in Wisconsin, Oh and I am not an attorney or CPA so please consult one! My daily chant- Have a great day!
There are cases here where we have still done a short...even after bankruptcy...lots depends too on the willingness and cooperation of the seller...out of state is sometimes "out of mind."
Wonder if anyone would consider giving agents a 'raise' due to all the new job requirements these days?!!
Thanks for sharing this story. Many families face very difficult decisions relating to their financial distress.
Sally, OMG I had this happen on a deal mid year last year...what a tough one...didn't come together...bad situation!
Sometimes, sadly...bankruptcy is the best course of action...
Sally
Sometimes those bankruptcy trustees are not the easiest people to work with.
How true. We just found out one of our short sellers has over $10,000 in liens on his property. Yikes....tax liens no less. Ooops. Questions we will now ask up front BEFORE we take the listing. Learning from experience is painful but effective.